Ripple CTO Weighs In on XRP Potential Path to Stability

The subject of volatility in crypto assets like XRP and their suitability for real-world, day-to-day payment transactions remains a hot topic in the crypto community. 

Recently, XRP community figure Mickle reignited this debate. He cited statements from Ripple’s Chief Technology Officer, David Schwartz, on the potential for tokens like XRP to achieve stability or at least mild volatility.

XRP Potential Path to Stability

In his remarks, Schwartz discussed the possibility of cryptocurrencies becoming more stable as they see greater real-world adoption. He suggested that real-world use cases would naturally lead to reduced volatility.

“We could see cryptocurrencies themselves become more stable as they get real-world adoption,” Schwartz explained. “Real-world use cases, I think, will lead to stability.”

Notably, Schwartz shared this view when asked to comment on the prospects of truly stable cryptocurrencies under no central control. He highlighted projects like DAI, a crypto-collateralized stablecoin that maintains its value through a claim on an Ethereum pool.

He explained that while these types of stablecoins are not entirely decentralized due to the need for a centralized price feed, they represent a step towards a more stable cryptocurrency ecosystem. “If those projects are successful, we could see more stability in the market,” he said.

XRP Army Seeks Path to Stability with AMM

Notably, some XRP community members believe that XRP would be more favorable if it embodied stability rather than the intense volatility in the crypto market. They argue that a more stable XRP would be better suited for cross-border payment transactions, where entities using XRP would not need to worry about significant price fluctuations.

For instance, during the wait for automated market makers (AMMs) functionality to be integrated into the XRP blockchain, some XRP community members pondered a scenario in which AMMs could help XRP adopt stablecoin features that would appeal to banks.

The Digital Perspectives PermaBull (DPP) channel host sparked the conversation then. He consulted Elon Musk’s AI Grok about XRP’s potential to become a “stablecoin” using AMMs. Grok confirmed this feasibility.

The AI explained that AMMs could stabilize XRP’s value by managing supply and demand through a liquidity pool containing both XRP and a stablecoin like USDC.

This mechanism could effectively control XRP’s price volatility, thereby enhancing confidence among adopters. The DPP host and other community members see this as a transformative development for XRP.

However, some critics have sarcastically remarked that XRP already has enough stability due to its poor price performance over an extended period. “More stable than it is now? Now that would be super stable,” said X user Nunya.